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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16544
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Is it true that Chinas domestic growth and stability are boosted

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Is it true that China's domestic growth and stability are boosted by American debt, and therefore, China is likely to NOT dump The United States even though there is a news article that came out today that says China blasts The United States for government shutdown and shouts out to the world to consider a de-Americanized world? Does The United States have enough money in reserves or something like that to pay bills in the event that the debt ceiling isn't raised by October 17, 2013? Thank you.

Megan C :

Thank you for your question, and thanks for using JustAnswer.com. It's true that a lot of China's growth and stability are pumped up by the US economy

Megan C :

they are one of the largest holders of our debt, but we also are a major source of exports for their country. So, if China does something drastic like dump their debt with us, they would also be hurting themselves because their growth depends on exports to the US (among other things).

Megan C :

If the debt ceiling is not raised, the US would run out of money to pay its bills. But, they would still be able to spend the amount of money that they bring in in taxes.

Megan C :

The US would have to prioritize their payments -decide who to pay and who to defer payment until later.

Megan C :

Everything you need to know about the debt ceiling can be found in an article, HERE

Megan C :

To be honest, we are walking a fine line. However, I doubt that Congress and the President will allow the country to hit the debt ceiling.

Megan C :

Allowing that to happen could cause a recession similar to the recession that we saw in 2008. I don't think the government would want to be the cause of that.

Megan C :

Do you have any further questions? If not, please rate as "excellent" so that I may receive credit for assisting you today

Megan C and other Finance Specialists are ready to help you
Thanks, Jaime for your positive rating. Please come back and visit me any time you have a question that needs answered. It was a pleasure working with you today.